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What Approximate Value Should a Firm Put on Being Able ÷\div

Question 61

Multiple Choice

What approximate value should a firm put on being able to permanently reduce the length of its collection period by one day if annual sales (all on credit) are $5,000,000 and the appropriate opportunity cost is 10 percent annually?


A) $1,370
B) $15,068
C) $13,700
D) $50,000 annual sales/365 x 1 day ÷\div .10/365
= ≈\approx $3.75 per day in interest,

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